Property Income Fund Continuous Disclosure Notice – 30 September 2012

The Australian Securities & Investments Commission (ASIC) requires

responsible entities of unlisted property schemes in which retail

investors invest to provide a statement addressing six benchmarks

and eight disclosure principles. These benchmarks and disclosure

principles are contained in ASIC Regulatory Guide 46: Unlisted

property schemes – Improving disclosure for retail investors.

This document has been prepared by Australian Unity Property

Limited (AUPL) as the Responsible Entity of the Property Income

Fund (Fund) to update investors on the information relevant to the

benchmark and disclosure principles. This document should be read

in conjunction with the latest Annual Report for the Fund, available

from our website australianunityinvestments.com.au. Alternatively,

you can call us on 13 29 39 for a free copy.

This document is dated 30 September 2012 and was issued on

1 November 2012. The financial information in this Continuous

Disclosure Notice is extracted from the Fund’s accounting and

property management records as at 30 September 2012 and is

based upon unaudited financial records unless stated otherwise.

The Fund’s composition and diversity will change over time as

assets are acquired or disposed and tenancies are re-let.

Disclosure principles and Benchmarks 1 to 3

Disclosure principles and Benchmarks 1 to 3 do not apply as the

Fund has no direct borrowings, and does not intend to borrow in

the future.

Portfolio diversification

Disclosure Principle 4 – Portfolio diversification

The Fund generally invests in direct property real estate, unlisted

property trusts and listed Australian REITs

The properties held directly or through unlisted trusts or listed

Australian REITs generally include (but are not limited to) the

following property sectors:

� Commercial (e.g. office buildings)

� Retail (e.g. shopping centres)

� Industrial (e.g. warehouses)

� Healthcare (e.g. hospitals or medical centres)

The Fund’s property portfolio is diversified by geographic location

and sector to help reduce risk.

Typically the Fund invests 40-70% of its assets in direct property and

unlisted property trusts, 20-50% in listed Australian REITs, with the

balance held in cash and similar investments.

Asset allocation at 30 September 2012

Asset ($m)

Direct property (includes related assets)

49.95 40.39%

Unlisted property 39.34 31.80%

Listed Australian REITs 32.01 25.88%

Cash and cash equivalents 2.39 1.93%

Total 123.69 100.00

Portfolio composition

Direct Property Portfolio

Property Details Tenancy Details Valuation Details

Major Tenant(s) All Tenants

Address

Lettab

le Area

(square m

etres)

Nam

e

% of Property by area

Number of Tenan

ts

Occupan

cy Rate %

(by area)

Weighted Average

Lease Expiry (years)

1

Current Valuation($m)

Valuation Date

Independent Valuer

Cap

italisation

Rate %

Book Value

($m)

40 Allara Street, Canberra, ACT 5,830 AusAid 52 9 100 3.37 19.90 Sep 12 CBRE 9.25 19.90

98 Ingleston Road, Wakerley, QLD 6,254 Vacant 0 0 0 0 7.75 Dec 11 Knight Frank 9.50 7.94

Salisbury Cinema Complex, SA 5,286 Salisbury Cinemas (trading as Hoyts)

64 10 100 1.65 6.50 Dec 11 CBRE 10.00 6.62

65 Beverage Drive, Tullamarine, VIC 6,250 Kings Transport 100 1 100 1.75 5.30 Jun 12 JLL 9.00 5.30

15 Telford Place, Arundel, QLD 2,057 Vodafone 100 1 100 2.73 5.20 Jun 12 Savills 9.50 5.20

11 Dansu Court, Hallam, VIC 4,559 Dayco Australia 100 2 100 6.64 5.00 Mar 12 JLL 8.25 5.00

Total (T)/

Weighted Average (A)

23

(T)

79.32

(A)

3.07

(A)

49.65

(T)

9.29

(A)

49.96

(T)

Notes

1. Weighted Average Lease Expiry by base rental income.

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Property Income Fund – Continuous Disclosure Notice 2

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

% of gross passing rental income

Year of lease expiry

Direct property lease expiry profile by income

Key Direct Property Portfolio Statistics

Direct Property Geographic Allocation by Value

Direct Property Sector Diversity

by Value

Direct Property Top 5 Tenants

by Income

■ ACT 1 asset 40.08% ■ Industrial 4 assets 46.82% ■ AusAid 24.46%

■ VIC 2 assets 20.75% ■ Office 1 asset 40.08% ■ Vodafone 15.83%

■ QLD 2 assets 26.08% ■ Retail 1 asset 13.10% ■ Kings Transport 9.73%

■ SA 1 asset 13.09%

■ Salisbury Cinemas (trading as Hoyts)

9.64%

■ Department of Land & Property Services

9.36%

■ Others 19.73%

■ Vacancy 11.25%

Property development

We believe the Fund can enhance its existing properties and add

further value to investors through selective exposure to property

development. In managing the Fund’s property portfolio, we may

refurbish or redevelop properties from time to time as required.

Material property developments will only be undertaken where

substantial pre-commitments to lease are in place and

development risk is appropriately mitigated.

There are no development projects in the Fund as at the date of

this document.

Exposure to listed Australian REITs

Investment ($m)

Australian Unity Property Securities Fund1 28.20

Australian Unity A-REIT Fund 3.81

Total 32.01 1 The Australian Unity Property Securities Fund gains exposure to listed property

securities via the Australian Unity A-REIT Fund.

Unlisted property portfolio

Investment ($m)

Australian Unity Retail Property Fund 19.57

Australian Unity Office Property Fund 10.14

Arena Childcare Property Fund 2.02

360 Capital Industrial Fund 1.79

MAB Diversified Property Trust 1.59

Australian Unity Industrial Property Trust 1.41

Australian Unity Second Industrial Trust 1.20

CorVal Industry House Trust 1.14

360 Capital Retail Fund 0.36

Australian Unity Investments Office Property Trust 0.12

Total 39.34

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Property Income Fund – Continuous Disclosure Notice 3

Valuation Policy

Benchmark 4 – Valuation policy

The Responsible Entity maintains and complies with a written

valuation policy that requires:

� a valuer to:

� be registered or licensed in the relevant state, territory or overseas

jurisdiction in which the property is located (where a registration

or licensing regime exists), or otherwise be a member of an

appropriate professional body in that jurisdiction; and

� be independent.

� procedures to be followed for dealing with any conflicts of interest

� rotation and diversity of valuers

� valuations to be obtained in accordance with a set timetable; and

� for each property, an independent valuation to be obtained:

� before the property is purchased:

− for a development property, on an ‘as is’ and ‘as if complete’

basis; and

− for all other property, on an ‘as is’ basis; and

� within two months after the directors form a view that there is a

likelihood that there has been a material change in the value of

the property.

AUPL meets this benchmark and complies with its Valuation

Policy. For further information or to obtain a copy of the policy

please contact us.

Regular valuation of underlying property assets is an important

aspect of managing the Fund in the best interests of investors.

In addition to the above requirements, AUPL’s Valuation Policy

also requires that:

� independent external valuations for new properties must be

complete no more than three months prior to exchange of

contracts

� independent external valuations for existing properties must

generally be conducted at least once in a financial year

� where there are multiple properties in a portfolio, the valuations

are to be staggered through the year; and

� where a property has been contracted for sale, the contracted

sale price may be adopted instead of the independent external

valuation.

Additionally, as part of our active management approach, we may

test asset values on market. At times, we may enter arrangements

at arm’s length with third parties which may impact the value of

assets within the portfolio including, but not limited to, put and

call options in respect of all or part of an asset within the portfolio.

If the value of an asset is impacted in this way, the value may

replace the last independent valuation obtained.

Related party transactions

Benchmark 5 and Disclosure Principle 5 – Related party

transactions

The Responsible Entity maintains and complies with a written policy

on related party transactions, including the assessment and approval

processes for such transactions and arrangements to manage

conflicts of interest.

AUPL meets this benchmark and complies with a Related Party

Policy.

Related party transactions carry a risk that they could be assessed

and reviewed less rigorously than transactions with other parties.

Australian Unity has policies and guidelines in place to manage

the risk of any actual or perceived conflict of interest as a result of

a related party transaction. Related party transactions with

Australian Unity Group entities are reviewed, approved and

monitored by senior management with clearly identified

governance policies and guidelines. Decisions in relation to

conflicts of interest and related party transactions are

documented.

As appropriate, we provide ongoing updates of material service

engagements and financial benefits that are paid to related

parties through the Fund Update and Continuous Disclosure

Notice. The value of related party payments are reported yearly as

part of the Fund’s Annual Report.

For further information about the Related Party Policy please

contact us. The latest Fund Update, Continuous Disclosure Notice,

and Annual Report can be found on our website

australianunityinvestments.com.au/pif. Alternatively we can send

you a free copy if you call us on 13 29 39.

Related Party activity

AUPL has appointed Australian Unity Property Management Pty

Ltd ABN 76 073 590 600 (AUPM) to provide some property

management services to the Fund. Investor approval is required

for this arrangement and the appointment has been made on

commercial terms and conditions and on an arm’s length basis.

AUPL and AUPM are wholly owned subsidiaries of Australian Unity

Limited (AUL) ABN 23 087 648 888 and are members of the

Australian Unity Group.

This transaction complies with Australian Unity’s Related Party

Policy.

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Property Income Fund – Continuous Disclosure Notice 4

Australian Unity Property Management

AUPM is a property management business that may, under a

written arrangement, provide some of the following services to

the Fund as nominated from time to time:

� strategic advice on property acquisitions and sales or

arranging the sale or acquisition of property assets

� management of premises

� debt arranging, debt structure advice, debt facility

negotiation and debt management

� valuation services

� leasing services; and

� property management and project supervision.

The appointment of AUPM for these services is not exclusive and

AUPL may engage external service providers to undertake these

functions.

From 1 July 2012 to 30 September 2012 no services were

provided by AUPM.

Other related party service providers

AUPL may appoint other related parties from time to time. Please

refer to our website for updates.

Investments

AUL and its subsidiaries (related parties) may invest in the Fund

and the Fund may invest in related parties from time to time.

Details of related party investments are be included in the Fund’s

Annual Report. Investor approval is not required as the

transactions are made on commercial terms and conditions and

on an arm’s length basis.

As at 30 September 2012 related parties held interests in the Fund

of $91.46 million (74.39%) based on net assets.

Distribution practices

Benchmark 6 and Disclosure Principle 6 – Distribution practices

The Scheme will only pay distributions from its cash from operations

(excluding borrowings) available for distribution.

The Fund does not meet this benchmark.

Generally, the Fund aims and currently sources distributions from

cash from operations however it is permitted to fund distribution

payments from other sources, such as capital, if we consider it to

be in the interests of our investors (for example if rental income is

suddenly reduced unexpectedly) and where payment from that

source is expected to be sustainable given the circumstances.

The Distribution Policy is aligned to the ongoing earning capacity

of the Fund. We expect the current level of distributions to be

sustainable over the next 12 months. Where the Fund makes

distributions from capital, this will have the effect of reducing

investor equity.

Where this occurs and the Fund has borrowings, the reduction in

investors equity will have the effect of increasing the gearing ratio

and gearing related risks. Where a Fund is close to its gearing related

covenants, the risk of breaching these covenants is increased.

Withdrawal rights

Disclosure Principle 7 – Withdrawal rights

Withdrawals from the Fund are available daily. We normally

endeavour to meet a withdrawal request within five days,

however the Fund’s Constitution permits up to 180 days for

withdrawals to be met. Payment of withdrawals could be

extended further if fund assets could not be sold within this time.

Further information about the Fund’s withdrawal arrangements is

contained in the Fund’s current PDS, which can be found on our

website australianunityinvestments.com.au.

For further enquiries

Please contact us either by telephone, email or mail as shown

below:

Address 114 Albert Road South Melbourne, VIC 3205

Investor Services 13 29 39

Adviser Services 1800 649 033

Website australianunityinvestments.com.au

Email investments@australianunity.com.au

Important information

This investment product is issued by Australian Unity Property Limited ABN 58 079 538

499 115 AFSL 234455 in its capacity as Responsible Entity. This information is intended

only to provide a broad summary of this financial product. Investment decisions

should not be made upon the basis of its past performance or distribution rate, since

future returns will vary. You should refer to the current Product Disclosure Statement if

you wish to know more about this product. A copy can be obtained by telephoning

13 29 39, or from our website australianunityinvestments.com.au. The information

provided here was current at the time of publication only, and we recommend that

you access our website for further information.